U.S., China wrap up talks on tariff battle

Joe McDonald, The Associated Press</span>
Published Wednesday, January 9, 2019 12:05AM EST
Last Updated Wednesday, January 9, 2019 4:02AM EST

BEIJING -- U.S. and Chinese negotiators wrapped up three days of talks aimed at ending a costly tariff battle in an optimistic atmosphere Wednesday after President Donald Trump said they were "going very well!"

No details were immediately announced, but Asian stock markets rose on news the talks originally planned for two days were extended to three. Hong Kong's main market index closed up 2.1 per cent and Tokyo rose 1.1 per cent.

A Chinese foreign ministry spokesman, Lu Kang, announced the talks had ended. Lu said he had no details and an official statement would be issued later.

The talks were the first face-to-face meeting since Trump and his Chinese counterpart, Xi Jinping, agreed Dec. 1 to suspend further punitive action against each other's imports for 90 days while they negotiate over the fight sparked by American complaints Beijing steals or pressures companies to hand over technology.

"Talks with China are going very well!" Trump said late Tuesday on Twitter.

Washington is pressing Beijing for changes including rolling back plans for government-led creation of Chinese global champions in robotics and other fields. Europe, Japan and other trading partners echo Washington's complaints that those violate Beijing's market-opening obligations.

Chinese officials have suggested Beijing might alter its industrial plans but reject pressure to abandon what they consider a path to prosperity and global influence. They have tried to defuse pressure for more sweeping change by offering concessions including purchasing more American soybeans, natural gas and other exports.

Neither side has given any indication its basic position has changed. Economists say the 90-day window is too short to resolve all the conflicts in trade relations between the biggest and second-biggest global economies.

Trump's "cheerleading tweet" feeds hopes for a settlement, Mizuho Bank's Vishnu Varathan said in a report. However, he cautioned, "Even if a deal is cobbled together, the more strident trade hawks in the White House and Trump may not sign off."

The talks went ahead despite tension over the arrest of a Chinese tech executive in Canada on U.S. charges related to possible violations of trade sanctions against Iran.

The American delegation is led by a deputy U.S. trade representative, Jeffrey D. Gerrish, and includes agriculture, energy, commerce, treasury and State Department officials.

Trump imposed tariff increases of up to 25 per cent on $250 billion of Chinese imports. China responded by imposing penalties on $110 billion of American goods, slowing customs clearance for U.S. companies and suspending issuing licenses in finance and other businesses.

Cooling economic growth in both countries is increasing pressure to reach a settlement.

Car and property sales have slumped as Chinese growth fell to a post-global crisis low of 6.5 per cent in the quarter ending in September.

The U.S. economy grew at an annual rate of 3.4 per cent in the third quarter but surveys show consumer confidence weakening.

For its part, Beijing is unhappy with U.S. export and investment curbs, suggesting it might demand concessions.

Chinese officials complain about controls on "dual use" technology with possible military applications. They say China's companies are treated unfairly in national security reviews of proposed corporate acquisitions, though almost all deals are approved unchanged.

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